Explaining Inventory and the Seller’s Market

By Brian Kelleher

I distinguish myself within the real estate industry by offering personal service of exceptional quality. My goal is to provide my clients the finest service, counsel and guidance. My greatest asset, and the key to my success, is YOU.

Here’s what “inventory” and “seller’s market” truly mean for our market.

The terms “inventory” and “seller’s market” get thrown around all the time and generally without any context, so today I’m going a little more in depth about them. 

Inventory is the number of homes on the real estate market at any given time. When we’re in a seller’s market, we have fewer than five months’ worth of inventory on the market. We come up with the months of inventory by taking the number of homes currently for sale divided by the average number of homes that are selling every month. In theory, the months of inventory is how long it will take to sell all the houses on the market if no other homes were listed. 

If we have five to six months of inventory, it’s called a balanced market, meaning it’s neither a seller’s or buyer’s market. More than six months of inventory is a buyer’s market. In Jefferson County, there are 660 homes for sale right now, and since the beginning of the year, 4,421 homes have sold; that equates to about 27 homes selling daily. When we crunch the numbers, we find we have less than one month of inventory on the market—more accurately, we have 24 days of inventory, so we’re firmly in a seller’s market. 

In my neighborhood, Crestwood North, we only have three homes for sale, and 58 have sold since the beginning of the year. That equates to one home being sold here every two to three days, or eight days’ worth of inventory. We couldn’t get much further into a seller’s market than we are today.

I just talked about a bunch of numbers, so if you have questions about these terms or there’s a video topic you’d like me to cover in the future, please just give me a call or shoot me an email. Please stay in touch!